Estate Planning

WHEN YOUR ATTORNEY IS A POTENTIAL WITNESS IN SURROGATE COURT

Published on: November 16, 2015 | by Ettinger Law Firm

WITNESS ADVOCATE RULE

In New York, as well as perhaps every other jurisdiction, an attorney may not serve as an attorney as well as a witness in the same case. Rules of Professional Conduct, Rule 3.7 is mandatory and not permissive. It does not matter if it is a bench trial, jury trial, traffic court case or surrogate’s court case. In fact, the rule is so important to judicial administration that even partners and members of the same firm cannot act as a witnesses. Courts refer to the issue as the lawyer-witness rule and it comes up often enough in surrogate court cases. The June 2, 2015 case of Will of Lublin, 2015 NY Slip Op 31038(U) is a good example of how estate lawyers face these issues. While the lawyer in Lublin avoided the issue of Rule 3.7, a small change could have made it not so. Very briefly, the decedent, Mr. Irving Lublin, executed a will in 1997 and passed away in 2010. Someone objected, claiming that the decedent did not have sufficient mental capacity to create such a will, the will was not properly executed and that the will was the result of fraud and undue influence. The lawyer who drafted the will was deposed during the discovery phase. If, perhaps, the attorney who created the will also represented the executor, an entirely plausible and even relatively normal scenario, the attorney would be disqualified, as he/she would be a material witness.

UNIQUE POSITION IN THE CASE

FINE ART, ANTIQUES AND OTHER COLLECTIBLES IN ESTATE PLANNING

Published on: November 14, 2015 | by Ettinger Law Firm

SELL NOW OR PASS ON

The issue of how to deal with the collection of fine art that you amassed over the years should be dealt with now rather than allowing your heirs decide for you. Perhaps your heirs do not have any appreciation for your original Ansel Adams or Edward Curtis photo collections. If you view it as an investment, then timing your sale to maximize profit should be the most important criteria. Timing may not be right for several years or it may be right now. If you are looking to maximize profit which will only go to to your estate, you may consider waiting to pass it on. If, you happen to value your art collection because of its intrinsic artistic value, you have another set of criteria by which to make your decision. Perhaps you have a family member you know would appreciate it more than say your son or daughter. Perhaps you should sell it to insure that the artistic value continues to be appreciated. Country Living spotlighted an artistic marble collector who decided to sell his collection to insure that it would continue to be appreciated. In any event, Capital gains tax on collectibles, gift tax and estate tax, both state and federal, must all be considered.

ESTATE TAX

LACKING IN MENTAL CAPACITY AND FAMILY, WHO DECIDES

Published on: November 6, 2015 | by Ettinger Law Firm

On June 24, 2015 a trial Court in California invalidated a California law as unconstitutional, which created a default surrogate decision maker when that individual is mentally incapacitated and does not have a family member, or anyone else for that matter, to make key decisions for them. The law and the issues addressed are not limited to California. Even though by definition, the law deals with individuals with no proxy decision maker, that does not mean someone did not exist in the past or could not step up to become one. Proxy decision makers pass away themselves, they move or simply just fade away and no longer attend to their responsibilities. New York law deals with these issues in a rather collaborative way. In 2010, New York enacted the New York Family Health Care Decisions Act, which creates a decision ladder for medical professionals who need to know with whom to check with for certain critical decisions. It was designed to avoid the parade of horribles that the California law dealt with. Certainly, no one wants a loved one or relative, even a distant relative, to have to rely on these provisions; they are used as a last resort.

DETERMINATION OF INCAPACITY

In the absence of a health care proxy, The New York Family Health Care Decisions Act begins to shape decisions, for all intents and purposes, at the time of the determination of incapacity.

WHAT OF MY ESTATE PLANNING IF MOVE TO ANOTHER JURISDICTION?

Published on: November 3, 2015 | by Ettinger Law Firm

Say you live here in New York and made significant plans to avoid probate. You have a will, own a business that you pass on and even set aside significant assets for your grandchildren. You worked hard to put your financial house in order. Now you find out that you have to move to another jurisdiction for work and will likely be there for some time. More likely than not your will and other plans to avoid probate will survive as legally enforceable documents in the new jurisdiction. Nevertheless, you worked hard for your plans to be finalized and do not want to live with the idea that “more likely than not” your plans will be followed. As such, it is always best to check with a local estate planning and review your plans.

FACTORS TO CONSIDER

There are a few things to keep in mind when it comes to decisions on where to live and changes in law and nuances on how to handle the change. Most laws are relatively uniform throughout the country. Procedure may be different but substantive laws are similar in many cases. Except when they are not. Some issues have two different ways of handling things. A good example is common law states versus community property states. Community property states are generally Rocky Mountain states and west (Louisiana and Wisconsin are the exceptions). There are some important differences in their approach to passing on assets between the two camps. Another factor to address is that you need to clarify your residence or domicile or you may end up paying taxes in two different states, as what happened to the heir to the Campbell’s soup fortune in 1939.

CAN AN HEIR BORROW AGAINST INHERITANCE?

Published on: October 31, 2015 | by Ettinger Law Firm

Perhaps your prodigal child wants to start a law firm or a medical practice and needs start up funding. You have some money set aside for your children’s and grandchildren’s inheritance but agree to loan them the money out of this fund. It’s not uncommon for these monies to be secured by a promissory note, even though many parents would not strictly enforce its terms. If the promissory note is not paid off by the time the parents pass away, it becomes an asset of the estate that must be accounted for. If it is a significant amount of money, the IRS or state tax authority will impute interest. If the parent decides to forgive the loan, that is usually considered taxable income to the child.

LOAN DOCUMENTS AND ESTATE DOCUMENTS CONTROL

The parent controls these issues and to the extent that it can be controlled during his or her life, they should be. Loans should be in writing, with the repayment schedule outlined. Most loans obtained on the open market have extensive outlines of the remedies that the creditor reserves. These are not necessary unless the parent actually intends to exercise these remedies. If no remedies are outlined in the document, the parent always has the right to document his or her intentions on how the estate should treat these loans.

INTELLECTUAL PROPERTY IN ESTATE PLANNING

Published on: October 29, 2015 | by Ettinger Law Firm

Intellectual property is an umbrella term that includes several different specific areas of the law. Trademark law, patent law, copyright laws and trade secret laws are all examples of intellectual property laws. The constitution guarantees that the federal government has exclusive jurisdiction over patent and copyright laws. Patent and copyright laws are designed to “promote the progress of science and useful arts.”

COPYRIGHTS, OWNERSHIP, HEIRS AND ESTATE PLANNING

Copyrights created after 1978 are generally good for the life of the author plus 70 years. When written for a corporation, so called work for hire copyrights, the copyright is valid for 95 after first publication date to 120 years after the work is created. To pass a copyright on to heirs, you must be careful to do it the right way. If a painter passes a painting on to an heir the right to control the copyright of that painting does not necessarily follow. The painter will have only passed on the original painting. To pass a copyright, the trust, will or other document must specifically mention that the copyright to the painting passes to the heir. It is entirely possible for a painter to pass the original work to a friend or partner but pass the copyright on to another person.

Back to the Basics – Probate Administration

Published on: October 25, 2015 | by Ettinger Law Firm

The death of a loved one is an especially traumatic event. Lives can be upended and surviving family members and friends can be left feeling lost and confused about how to carry on. This is especially true when the death occurs suddenly or under tragic circumstances. Unfortunately, the law does not provide grief-stricken family and friends much time to mourn their loss before important work must be done. This important work involves admitting the deceased’s estate to probate and then administering that estate.

In New York and elsewhere, an individual who dies with a will or similar document in place is said to die testate. If a person does not have such a document in place, the person dies intestate.

Dying Testate: If the deceased left a will, the first step of administering the estate involves probating the will, or proving the will’s validity. Usually this involves simply introducing the will into the appropriate court. Once the will has been probated, the executor or administrator named in the will is tasked with carrying out the wishes of the deceased as expressed in the will, settling any lawful debts the deceased must pay, and providing an accounting or report to the court showing that the deceased’s assets were dispersed according to the terms of the will.

Power of Attorney Should Complement Your Will

Published on: October 23, 2015 | by Ettinger Law Firm

Making the decisions about your estate plan can be a daunting task. We are faced with a plethora of uncertainties and questions about our future and what to do about our “stuff.” There are a few documents that a client should consider executing with an attorney to protect their estate. One document called a Power of Attorney, that often complements a Will, can be overlooked by a client.

Understanding the Legal Document

A Power of Attorney typically comes in three fashions: a General Power of Attorney, a Specific Power of Attorney, and a Durable Power of Attorney. The distinctions are subtle, but extremely important. A General Power of Attorney allows a client to give authority to someone else to make decisions on anything that the client herself could make, such as financial and/or property decisions. The client is known as the “Principal” and the person that the client gives the power to is known as the “Agent.” In a very simple way, the Agent acts on behalf of the Principal in certain capacities, such as writing a check or selling a property.

Back to the Basics – Demystifying Probate

Published on: September 27, 2015 | by Ettinger Law Firm

Are you being told to avoid probate at all costs? The probate process is characterized as a long and tedious process of endless red tape and expense. In many cases avoiding probate can be a worthwhile goal; however, a closer look at the probate process may reduce the angst that is often associated with a sometimes inevitable end to the best laid plans.

Some Basic Vocabulary

If you have been exposed to the probate process in some capacity in the past in connection with a deceased relative or friend you may have had heard some terms not often used in everyday life. Here are a few basic terms you should know:

Making College Savings a Part of Your Estate Plan

Published on: September 15, 2015 | by Ettinger Law Firm

Saving for the cost of your child’s or grandchild’s college education can be intimidating. Participating in a qualified tuition program, also known as a 529 college savings plan, that is administered by the State of New York can be an effective part of your estate plan, and a great way to save for college tuition.

What is a 529 Plan?

When you (the “participant”) enroll in a 529 savings plan, you open a special account with the sponsoring state program. This account is a tax-advantaged account that helps you pay for your designated beneficiary’s qualified higher education expenses, including tuition, fees, room and board, and required books.